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Economics, Politics, Legalities, Ethics and Sociology of Pyramid Schemes / Multi-level Marketing.
The False Profits Blog, published by PSA President, Robert FitzPatrick, is a sane, rational and fact-based forum. Read, get podcasts, make comments, subscribe.

Feds Taking a Look at Pre-Paid Legal's Practices

October 2009

The MLM, Pre-Paid Legal, has been served a subpoena from the Securities & Exchange Commission (SEC) demanding documents related to its treasury stock repurchase program, marketing practices, membership information, and disclosure practices, among other matters. Pre-Paid Legal acknowledged the federal inquiry in a press release.

Pre-Paid's stock plummetted more than 20% when the news became known.

Pre-Paid Legal's executives have used company revenue in a massive stock buy-back scheme that reduced the company's net worth by nearly 50% while pumping up its stock price. Top insiders have been selling off millions of dollars of their personal stock at the higher prices, while Pre-Paid's revenue declined in recent quarters, recruitment of salespeople dropped and sales to Members went down.

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This page last updated on 10/11/09